Operator buys elder-care centers

If at first you don't succeed, try to buy again.

That philosophy seems to have paid off for a big operator of senior communities that recently added two Mount Pleasant elder-care properties to its national portfolio.

Five Star Quality Care Inc. last month paid $44 million for a group of residences in the Carolinas that previously were owned and operated by bankrupt affiliates of Oregon-based Sunwest Management.

Among the newly acquired properties were the 38-bed Sweetgrass Court Memory Care Community on Anna Knapp Boulevard and the 85-bed Sweetgrass Village Assisted Living Community on Mathis Ferry Road.

Charleston County property records show the Newton, Mass.-based buyer paid about $1.3 million for the smaller property and $2.3 million for the larger development. The combined $3.6 million price tag is less than half of the appraised value of $8.3 million.

The two East Cooper elder-care centers were placed under bankruptcy protection in August after the company that controlled them defaulted on a $58 million loan. They have remained open.

Sweetgrass Court serves elderly patients who have been diagnosed with Alzheimer's disease and other forms of dementia. The nearby Sweetgrass Village is a full-service apartment complex for seniors who can live on their own but need some assistance.

The two centers were purchased about two years ago by companies owned by Senior Living Properties II, which was managed by Sunwest Management.

Salem, Ore.-based Sunwest had been one of the largest senior-housing providers in the nation. But the company's mounting cash-flow crunch — it has about $500 million in annual revenue and $1.8 billion in debts — have forced at least 15 of its 250 facilities into bankruptcy since the summer. Another four to five facilities are being "lost to lenders" weekly, according to recently filed court papers.

The new owner of the Sweetgrass facilities knew exactly what it was buying.

"We looked at them two or three years ago when they were for sale previously and actually bid quite a bit higher than what we ended up getting them for," said Timothy A. Bonang, Five Star's director of investor relations. "In the prior sales process, we were not the winning bidder."

The acquisition brings to 16 the number of senior communities the company owns in South Carolina. Its other Palmetto State holdings are operated mostly under the Morningside moniker in Beaufort, Georgetown, Orangeburg, Camden, Greenwood, Hartsville, Lancaster, Lexington, Rock Hill, Seneca, Sumter and Myrtle Beach.

At the Mount Pleasant locations, workers recently installed small placards at the bottom of the signage denoting the centers as Five Star properties. Otherwise, Bonang said, residents should not notice many changes.

"At the end of the day, it's really a local business," he said.

Contact John McDermott at 937-5572 or jmcdermott@postandcourier.com.